brentp

OK - we are headed to Scotland and are trying to get our money plans in order before we leave. All purchases will be on a low to no FTF fee credit card in Pounds Sterling (and avoid DCC). That piece we are ok with. For getting cash, we understand the best way is at an ATM. We currently bank with Bank Of America and understand if we use Barclay's ATMs in the UK it is suppose to be fee-free. Sounds great!

However, the question we have is how do they handle the conversion from pounds back to USD?. Pounds out the ATM needs to be converted to USDs somewhere. Is it done via the 'interbank rate' used by Visa plus Visa’s 1% (BOA issues a Visa ATM/Debit Card), . . . or does BoA use an ‘in-house’ rate that could be inflated? I've found conflicting data on this subject and would like to know exactly how it is done in advance.

Also, Barclay’s have ‘Woolwich’ branches. Does anyone know if ‘Woolwich’ ATMs are part of the global alliance? From what I’ve found – I think they are – but again would like to know in advance.

As a side note: the other alternative for cash for us would be the use of a credit card we found through a local CU which does NOT have a cash advance fee and an very low Cash Advance interest rate (7.9%). I know most say don’t go this route – but, without the 3% cash advance fee and no FTF fee from the bank (other than the 1% at Visa), this sounds like a viable option if BoA uses an inflated conversion rate. Anyway – any comments on this approach would also be appreciated?

brentp

Well - thought I'd update this with what I was told by BoA. What BoA’s foreign conversion office told me is that the conversion rate for ATM transactions will be determined by the bank where you withdrew the money from (eg: in the UK if you use Barclays, Barclays will determine the exchange rate). They also told me that BoA will add on as a separate line item a 3% conversion fee (although I have an EMAIL from another person at BoA that says it is 3% for point of sale transactions [debit type] and 1% for ATM transactions).

Funny thing is, . . . because Barclays is part of the 'Global Alliance', . . . they will waive the $5 transaction fee. Let’s see, . . . 3% on a $1000 worth of transactions is $30 (but I saved $5 x the number of times I would use Barclays).

Bottom line, . . . I don't think using BoA’s ATM card this is as good an option as people may think. I am still leaning toward using my local CU’s Platinum Visa for a cash advance at an ATM. They do not have a cash advance fee (eg: no 3% cash advance like most Credit Cards), have the low 7.9% interest (which would accrue immediately – another 0.5% over the course of ~3 weeks), . . . and use the Visa interbank rate plus the 1% ISA (at least I believe this would be the process – need to verify).

I know there are a lot of details here that I am considering, but I don’t like to be surprised when I get home from vacation with tons of excess fees. I was burned with my MBNA card the last time I used it (when the fees jumped through the roof). Don’t want to go through this again.

It would be really nice to know what others that have actually used a BoA card overseas is seeing on their statements and if you compare the conversion rate to the Visa rate.

Michael

I can't speak for exchanges in Scotland, but last week we used our BofA ATM card in Scotiabank branches in Mexico and the exchange rate was within a couple pennies of the rate quoted here: http://www.xe.com/ucc/. There were no extra charges.

Gardyloo

I had a number of BofA (Visa) transactions post from a several-country trip last month and I am utterly confused as to whether I was ripped or rewarded. I used the card for Barclay ATM transactions but also for hotel bills etc., then had several transactions with non-network/alliance banks in places like Israel.

Here's my take.

Money center banks like BofA and Barclays et al have currency speculators that went to B-school and get paid real good to figure out how to optimize the bank's yield on all sorts of foreign exchange transactions - ATMs, travelers checks, Visa/MC transactions, currency purchase/sell activities yadda yadda.

If they negotiate a great $/€ base rate, then put a skim on your ATM card, they win. If they negotiate a lousy $/£ rate and skim less on your card, they win. If they market your card with mileage but then add $50 a year to the fee and then skim on an ATM transaction, they win. See a pattern here?

Point being, I'm not smart enough or hard-wired enough into the London currency markets to know when I'm getting nailed more or less. I know I'm getting nailed, but I figure it's a lot better now than a few decades ago when my banker at a major bank HQ (said bank being subsequently eaten by the BofA) told me that I should move all of my USD into Sterling (I was moving to the UK at the time) because the exchange rate of £1 = $2.48 was "never going to get better."

I hope that guy spent out his years at BofA making cold calls to used car dealers.

Michael

With all this discussion about exchange rate, next summer I plan to withdraw 100€ from a global alliance bank using my BofA ATM card (presumably no extra charges) and then immediately withdraw the same amount of money using my credit union ATM card (they only charge the 1% Visa fee) and see if there is a difference in the rates. Or has anyone done this already to see what the variations might be?

brentp

Gardyloo - I know, I know, . . . the banker wants to get paid . I just hate to be the one they skim the most. Over 2 weeks – this could add up.

Michael - I guess your recent results in Mexico may conflict with what BoA told me today. Were you referring to a few pennies for a single Peso, or did you do the math for the full amount of your ATM transaction and were off by a few pennies on that? This would help me figure out where they might be coming from.

BTW - I have been trying to get a straight answer from BoA for over 1 week now, . . . but to no avail. I guess they don't want there customers to know how their business model works, . . . or else they might seek other service providers. They really do like to push the ‘no fees’ concept – I got that answer every time I started a conversation with a direct question – how/what conversion rate do you use on foreign ATM transactions. At least I am pretty sure now it is not the Visa interbank rate.

Anyway, at a minimum, I guess when I am in Scotland, . . . I can make a withdrawal the very first day and then check the results in my account on-line a day or two later. From that, I can decide if it makes sense to continue to use their ATM card or switch to my CU credit card.

Michael

I did the math. 3000 pesos = $286.01 on 1/26/06; 2000 pesos = 190.67 on 1/25/06, etc.

brentp

Cool, . . . maybe the reps at BoA that I've been talking too have now clue what they are talking about. It has happened before!

Your experience is right near the 'no fee' point I would like to be at. This makes me feel a bit better and I will give it a try the first day I arrive and check a couple of days later on-line to see what I got.

Thanks for posting your experience, . . . it helps!

Michael

I am assuming that when the automated voice gives me my recent transactions over the telephone that it includes any charges for that transaction even though such charges are listed separately on the monthly statement. I'll know when the statement comes in.